The hype vs the reality of digital transformation

Digital transformation has been a focus area for companies for some time now. However, many organisations are finding that their digital transformation efforts have been inefficient, and as a result are having to re-think current projects due to a wide range of organisational, technical and operational barriers to change.

“People are still confused about what digital transformation is. While the term summons the idea that it will result in a complete metamorphosis of how a company uses technology, the reality is much more complicated,” says Chris Volschenk, CEO at Nexio.

He adds that the end customer generally expects reliability and simplicity, but that achieving these goals requires organisations to contend with more complexity than they can comfortably deal with. “Digital transformation is not a project, and it is about far more than digitising analogue processes. It’s an ongoing activity that requires buy-in at almost every level of the business. It is about understanding – and working with – the reality, rather than being driven by the hype and buzzwords. It’s about creating a culture of innovation and making digital thinking central to everything that a business does.”

The hype: Digital transformation is about modernising
The reality: It is about innovation, a mindset and transformation

To remain competitive, companies must meet the requirements of their industry and customers faster than ever before. This means that organisations must be able to react faster, and many look to digital transformation to enable this. However, too many businesses focus on one or two elements, losing sight of the fact that effective transformation requires all of a company’s assets – digital, analogue, and human – need to be managed, driven and integrated effectively, Volschenk says.

“Transformation of the whole company should be the ultimate goal, because that is how opportunities for innovation are created. Innovation cannot be achieved by smarter decision making, or faster processes, or new technologies alone. It requires a holistic approach that includes every single component of the business, including its people. Until the technology, people, processes, and information are integrated and transformed together, with an overarching view on security, a company can’t achieve real change,” he explains.

“Merely modernising or digitising analogue processes is not transformation. The business needs to understand what assets they have, and how these can be used to create something outside of the norm. This is incredibly complicated for big organisations to get right.”

The hype: Digital transformation is technology-driven
The reality: It requires a holistic approach integrating technology, processes and information. Most importantly it must be people-driven

While the broadly-agreed definition of digital transformation is that it is about adopting technology and harnessing its power to overcome business challenges and unlock growth opportunities, too many companies forget that at its core, digital transformation is about fundamentally changing the way that organisations design and deliver services and how they operate internally.

“Digital transformation starts from the top. If the will to change isn’t part of it, any digital initiatives will fail. This means that digital transformation must include every department, from HR, to finance, to marketing, and all of the others, in order to drive a culture of innovation. Digital transformation is a team sport, not an individual one, and before the technology comes into it, a company must develop programmes for staff to join the journey. Once the digital thinking is in place, the business can create a platform where the technology enables everything the company is trying to achieve,” Volschenk says.

The hype: Digital transformation is a project to be completed
The reality: It is a journey that includes continuous improvement

Volschenk points out that digital transformation should be an end-to-end programme, because the company’s game plan can change continuously to meet changing market requirements. “If a company doesn’t focus on the fact that they should have an iterative approach, they will not gain the benefits – or achieve transformation,” he says.

“Given that customer behaviour is changing alongside the pace of innovation, and innovation is being driven by the capabilities of technology, ongoing digital initiatives have become a business imperative. What is effective today won’t be as effective tomorrow, and even less so a month from now. Organisations must therefore be able to always have access to the latest and best technologies, while their people and processes continuously keep up. That, in turn, requires constant fine-tuning of how the business operates. Given that digital transformation is about dealing with change than about the tools that enable this, organisations should approach digital transformation as part of a philosophy of continuous improvement to boost competitive performance.”

The hype: Digital transformation will immediately offer benefits
The reality: You will fail at least once

According to Volschenk, the very nature of digital transformation forces failure. Companies should therefore adopt an approach promoted by digital leaders across every sector: Be prepared to fail, but fail fast.

“If the organisation doesn’t adopt a culture where failure is part of ultimate success, they should not embark on digital transformation initiatives. If they aren’t failing, they aren’t being aggressive enough. If the organisation can accept failure, it can stop wasting time on things that aren’t working and move on to the next initiative, allowing the company to start gaining the benefits of a more agile and innovative approach.”